Datadog, Inc. stock research
FY2025 Q4
Datadog (DDOG) Gross Margin — Quarter Ended Dec 31, 2025
Revenue and gross profit both increased compared to the previous quarter and the same quarter last year. Gross margin remained high and stable, with a slight sequential improvement and a marginal year-over-year decline.
Gross margin takeaway
Quarter ended Dec 31, 2025 · FY2025 Q4
Revenue and gross profit both increased compared to the previous quarter and the same quarter last year. Gross margin remained high and stable, with a slight sequential improvement and a marginal year-over-year decline.
- Revenue grew at a faster rate than cost of revenue on a sequential basis, supporting gross margin improvement. Year-over-year, cost of revenue increased slightly more than revenue, leading to a marginal gross margin decline.
- Sequentially, gross margin improved from 80.1% to 80.4%, while year-over-year it edged down from 80.5% to 80.4%. Revenue and gross profit were higher in both comparisons.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
80.4%
Gross profit
$766.3M
Revenue
$953.2M
Cost of revenue
$186.9M
Quarter-over-quarter change
+0.3 pts
Year-over-year change
-0.1 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Mar 31, 2025 | $761.6M | $603.9M | $157.6M | 79.3% |
| Jun 30, 2025 | $826.8M | $660.8M | $166.0M | 79.9% |
| Sep 30, 2025 | $885.7M | $709.2M | $176.5M | 80.1% |
| Dec 31, 2025 | $953.2M | $766.3M | $186.9M | 80.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Sep 30, 2025
+0.3 pts
Year-over-year change
Dec 31, 2024
-0.1 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
Revenue grew at a faster rate than cost of revenue on a sequential basis, supporting gross margin improvement. Year-over-year, cost of revenue increased slightly more than revenue, leading to a marginal gross margin decline.
Sequentially, gross margin improved from 80.1% to 80.4%, while year-over-year it edged down from 80.5% to 80.4%. Revenue and gross profit were higher in both comparisons.
Monitor the trend of cost of revenue relative to revenue, as the year-over-year increase in cost of revenue slightly outpaced revenue growth, putting pressure on gross margin.